The security breach of customer data at Target Corp. during the recent holiday season underscores the growing threat of cyber theft to retail businesses.
Between last November 27 and December 15, hackers stole data on up to 110 million debit and credit cards from customers of Target, the nation’s second largest discount store. The breach occurred when a virus infected the company’s point-of-sale terminals throughout the chain, compromising debit and credit cards account numbers, expiration dates, cardholder names, e=mail addresses, home addresses, phone numbers, and credit verification value – information that bad guys have used to make counterfeit credit cards.
Immediately after a third party discovered the breach, the retail giant: 1) alerted the relevant authorities and banks; 2) partnered with a forensics firm to investigate the crime; and 3) warned recent customers to monitor suspicious bank account activity, and contact the Federal Trade Commission and credit card monitoring systems portals. Said Chief Executive Officer Gregg Steinhafel, “Target’s first priority is preserving the trust of our guests, and we have moved swiftly to address this issue, so guests can shop with confidence.”
The company fended off thousands of complaints from customers about fraudulent charges on their credit cards and bank accounts, as well as dealing with a significant number of class action lawsuits alleging invasion of privacy.
Although it’s too early to put a price tag on the breach, in 2009 retailer T.J. Maxx paid $9.7 million in a settlement with 41 U.S. states over the loss of customer data after hackers stole information on 45.7 million credit and debit cards two years earlier.
The Target data breach offers a stark reminder of why your business needs to protect confidential customer information – and to carry Cyber Liability insurance.
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